The following is an excerpt from the January 11, 2012 blog for Decision Point subscribers.
The market is trading sideways along horizontal resistance at the October high. Indicators are barely changed, providing little insight. Upcoming news from Europe among other reports being released tomorrow could be holding investors back. As we've seen in the recent past, headlines can have a very negative or very positive effect on the market, so we need to be prepared for the weather ahead by considering tight stops on investments or just laying low.
Stocks opened slightly lower today and then spent the rest of the day slowly floating upward to ultimately close virtually unchanged.
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STOCKS: Based upon a 12/05/2011 Thrust/Trend Model BUY signal, our current intermediate-term market posture for the S&P 500 is bullish. The long-term component of the Trend Model is on a BUY signal as of 1/5/2012, so our long-term posture is bullish.
The market appears to still be in a holding pattern, not able to break cleanly through horizontal resistance at the October high. According to CNBC, there are a boatload of reports coming out tomorrow, including news from the European Central Bank and various bond auctions. The gusty winds coming from the headlines may blow prices around depending on the slant and spin.
Nothing new to report on our indicators, I've decided to include a short version of our favorite indicators taken from the "Key Indicator Review" selection on our front page menu. It is a great way to get a quick review of all of the indicators at once time alongside other indexes (I didn't include the other index charts).
Intermediate-term indicators are still rising (like the ITBM/ITVM) and short-term indicators are still rather stagnant in the slightly overbought range.
Bottom Line: The market is trading sideways along horizontal resistance at the October high. Indicators are barely changed, providing little insight. Upcoming news from Europe among other reports being released tomorrow could be holding investors back. As we've seen in the recent past, headlines can have a very negative or very positive effect on the market, so we need to be prepared for the weather ahead by considering tight stops on investments or just laying low.
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GOLD: As of 12/13/2011 Gold is on a Trend Model NEUTRAL signal.
On the daily gold chart, we have been watching gold slowly moving higher since the low last December that bounced off of the 50-EMA. A look at the weekly gold chart more clearly illustrates the importance of that low as it bounce up off of long-term support of the rising bottoms line. The PMO is still rising strongly.
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CRUDE OIL (USO): As of 10/27/2011 United States Oil Fund (USO) is on a Trend Model BUY signal.
USO has been bouncing around the declining tops line or the top of the triangle formation. At this point, the declining tops line is becoming somewhat irrelevant. There is a short-term rising bottoms that is providing support but there is sturdy horizontal resistance at 40. The PMO is closing in on its EMA for a negative crossover. However, the it is also flattening out, making it susceptible to numerous direction changes and crossovers, so it isn't a great barometer right now.
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Technical analysis is a windsock, not a crystal ball.
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